Biomass Derivatives Competitive with Heating Oil Costs
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Biomass Derivatives Competitive with Heating Oil Costs Transportation fuel Heat or electricity • Data are from literature, except heating oil is adjusted from 2011 winter average • Fuel costs vary widely based on feedstock, location, and technology option • Retail pellet costs are based on current prices in NE (~$243/ton) • Densifying biomass for heating (e.g. pyrolysis oil or pellets) can be a cost- competitive feedstock for residential heating system • These are not “drop-in” fuels for current liquid handling/infrastructure/applications • Logistics and supply chain considerations begin to predominate for residential biothermal 1 Energy Efficiency & Renewable Energy eere.energy.gov Biothermal Offers Competitive Economics Particularly in Northeast Bio-oils as a heating oil substitute may present a significant opportunity to solve a relevant problem, save consumers money… particularly in the Northeast Heating Oil Prices and Pyrolysis Oil Price Projections in 2011 40 Heating oil prices are 2011 Biothermal leverages 35 monthly averages per EIA. Pyrolysis oil prices are ongoing work in the OBP 30 bio-oil production and projection. upgrading and other 25 work in thermochemical 20 including: 36.35 •Corrosion/material 15 $/GJ in 2011in $/GJ 25.63 25.75 compatibility 10 20.49 20.73 21.51 •Feedstock logistics and pre-processing 5 •Densification 0 •Fast pyrolysis U.S. New England U.S. New England Raw Pyrolysis Fully Wholesale Wholesale Residential Residential Oils Upgraded Heating Oil Heating Oil Heating Oil Heating Oil Pyrolysis Oils Oil Type and Price 2 Energy Efficiency & Renewable Energy eere.energy.gov What We Hope to Accomplish • What will it take to make pyrolysis oil an acceptable substitute for heating oil? • How much conditioning and supply chain changes will it take to make the pyrolysis oil acceptable? – Final fuel specifications for home and institutional heating – should we target different specifications for each market? – Is pyrolysis blending with heating oil a worthwhile possibility? – Can we get the costs of fully conditioned pyrolysis oil below that of heating oil? – What R&D and certifications are required? – What are the critical gaps in our analysis and understanding? – What might be an achievable time frame and at what cost will make this happen (wild guess)? • What else should we be asking? 3 Energy Efficiency & Renewable Energy eere.energy.gov Benefits of Pyrolysis Oil Substitution for Heating Oil Substitute Pyrolysis Oils for Heating Oil • Burner injectors and nozzle replacements likely required • New injectors and nozzles assumed to be $1,000 per furnace • Full tank replacement assumed to be $1,800 - $5,000 Payback occurs within 4 years for most households Retrofit payback likely to occur within 0.5 – 3 years, depending on tank swap out requirements 4 Energy Efficiency & Renewable Energy eere.energy.gov Benefits of Substitution of Pellets for Heating Oil Replace Fuel Oil Furnace with Pellet Stove(s) • Average cost of one pellet stove installation is $3,000-4,000 • Central furnace replacement cost is $8,000-10,000 • With self-feed hopper, costs can amount to >$15,000 Multi-day self $4.00/gal oil operating furnace $3.50/gal oil $3.00/gal oil Central furnace/boiler Single stove replacement Payback occurs within 4-6 years for most households Payback period would be reduced with lower price of pellets, or higher priced oil We have not yet addressed GHG benefits 5 Energy Efficiency & Renewable Energy eere.energy.gov Northeast Heating Oil Demand • Northeast is largest regional consumer of heating oil in the U.S. • Northeast is the location of >80% of the 7.2 million U.S. homes that used heating oil in 2009 • Average household consumes 850 gallons of heating oil per season (October – March) • New York, Maine, Massachusetts, New Jersey, and Vermont have announced state mandates to transition to ultra-low sulfur fuels Northeast Heating Oil Supply-Demand Balance and Projections: Annual Average 2007-2013 6 Energy Efficiency & Renewable Energy eere.energy.gov Biomass is Competitive with Heating Oil Costs • Data are from literature, except heating oil is adjusted from 2011 winter average • Fuel costs vary widely based on feedstock, location, and technology option • Conditioned pyrolysis can be substituted for heating oil in NE • Retail pellet costs are based on current prices in NE 45.0 40.0 35.0 30.0 25.0 20.0 Transport 15.0 Heat 10.0 5.0 Average $/GJ 2007 Average 0.0 Retail Pellets Retail Oils (Evergent) Raw Pyrolysis Pyrolysis Oils Raw US Gasoline, 2011 Gasoline,US Bulk IndustrialPellets Bulk Heating Oil ($3.45/gal) Heating Fully Upgraded Pyrolysis Pyrolysis Upgraded Fully 7 Energy Efficiency & Renewable Energy eere.energy.gov .